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Consumers give US economy a lift before election

The Associated Press

Posted:
11/01/2012 11:15:46 PM MDT

Updated:
11/01/2012 11:17:11 PM MDT

In this Wednesday, Oct. 17, 2012, photo, people shop on Wednesday, Oct. 17, 2012, in Philadelphia. Americans' confidence in the economy surged in October to the highest level in nearly five years, as many were encouraged by an improving job market. The Conference Board said Thursday, Nov. 1, 2012, that its consumer confidence index increased in October to 72.2. That's up from 70.3 in September and the highest reading since February 2008, two months into the Great Recession. (AP Photo/Matt Rourke)
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Matt Rourke
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WASHINGTON -- A flurry of data issued Thursday sketched a brightening view of the U.S. economy in the final days before a presidential election that will pivot on the strength of the recovery.

Cheaper gas, rising home prices and lower unemployment have given consumers the confidence to spend more. And retailers, auto dealers and manufacturers are benefiting.

At the same time, many employers remain anxious about the economy, which is why only modest hiring gains are forecast for Friday's jobs report for October. It will be the last major report on the economy before Election Day.

Both presidential candidates pressed their arguments Thursday for why President Barack Obama's economic stewardship should or should not earn him another four-year term. Campaigning in Roanoke, Va., Mitt Romney argued that under Obama, household incomes have fallen behind inflation and poverty has worsened.

Obama, in a speech in Green Bay, Wis., contended that Romney's proposals are the same "top-down policies that crashed our economy." The president said his own economic approach was similar to Bill Clinton's in the 1990s, when the U.S. economy generated tens of millions of jobs and incomes surged.

Economists think Friday's jobs report will show that the unemployment rate rose to

7.9 percent in October from 7.8 percent in September. Coming so close to the election, though, the most recent economic figures aren't expected to alter the outcome. Few voters are thought to still be undecided.

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"People have given this a lot of thought," said Andrew Kohut, president of the Pew Research Center. "One report, unless it is a real shocker, is unlikely to affect their view of whether Obama has done a good job with the economy or if Romney would do a better job."

This week, Pew released a poll showing that likely voters, by 50 percent to 42 percent, thought Romney would do better at boosting job growth.

Here's what the reports issued Thursday showed about the state of the U.S. economy:

Americans have taken heart from recent declines in the unemployment rate. They appear increasingly confident that the economy can sustain its modest recovery. That's translating into more consumer spending -- the fuel of U.S. economic growth -- even though businesses have pulled back and exports have slowed.

Consumer confidence jumped last month. The Conference Board index of confidence reached 72.2, its highest since February 2008, two months into the Great Recession.

The index is still below the level of 90 that's consistent with a healthy economy. But it's up from 40.9 a year ago -- the sharpest one-year increase since 1994, according to Robert Kavcic, an economist at BMO Capital Markets. And the index is far above its all-time low of 25.3 in February 2009, in the midst of the financial crisis.

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